Troika deal within reach as talks on public sector reforms get under way

The troika will meet Administrative Reform Minister Kyriakos Mitsotakis for a third time on Thursday in a bid to reach an agreement over civil service sackings so Greece has a chance of seeing its next bailout tranche of 8.1 billion euros being approved by eurozone finance ministers when they meet on Monday.

Negotiations between the two sides have so far foundered on public sector dismissals and the labor mobility scheme for 12,500 civil servants. Sources at the Administrative Reform Ministry told Kathimerini on Wednesday that “the basis for reaching an agreement is in place.”

One of the key problems is that the visiting inspectors refuse to recognize the 2,600 sackings at public broadcaster ERT as permanent dismissals. Until they are given detailed plans of how the new broadcaster will operate and how many employees it will take on, the officials will not accept that the government has carried out any firings. The two-party coalition aims to create a new TV and radio service with about 1,000 staff members, helping it reach its target of reducing civil servant numbers by 4,000 this year.

There is also troika skepticism over the mobility scheme for public sector workers. Speaking to Skai TV late on Tuesday, Mitsotakis admitted that the program was not ready and he would like three to five months more to complete it. It appears, though, that there could be room for compromise on this matter as some alternatives have been discussed by Athens and its lenders. A possible solution is for the troika to accept that civil servants who have already been transferred to different jobs could be counted among those inducted into the mobility scheme. In return, though, the troika wants the program to last for six months rather than 12.

Greece is under pressure to complete negotiations on Thursday to allow the Euro Working Group enough time to prepare its recommendations on the bailout installment, which is likely to be divided into sub-tranches, for Monday’s Eurogroup.

A European Union official speaking on condition of anonymity to reporters in Brussels said a failure to agree now would lead to Greece’s tranche being delayed. “If we don‘t conclude this review, I don‘t see any disbursement for the next three months,” the official said. “It is not a course I find advisable.”

If there is no agreement now, Greece could have to wait until the next Eurogroup in September for a disbursement, by which time the International Monetary Fund might have stopped providing funds for the bailout. “Is it a disaster? No. Is it uncomfortable? Yes,” said the EU official.